Royal Gold Reports Results for Second Quarter Fiscal Year 2013

Record royalty revenue of
$79.9 million
, a 16% increase
year-over-year

Record Adjusted EBITDA1 of
$73.4 million
,
an 18% increase year-over-year

DENVER
--(BUSINESS WIRE)-- Royal Gold, Inc.
(NASDAQ:RGLD) (TSX:RGL) today announced net
income attributable to Royal Gold
stockholders of
$27.2 million
, or
$0.42
per basic share, on record royalty revenue of
$79.9 million
for the
second quarter of fiscal 2013. This compares to net income attributable
to Royal Gold
stockholders of
$23.4 million
, or
$0.42
per basic share,
on royalty revenue of
$68.8 million
for the second quarter of fiscal
2012.

For the six-month period ended
December 31, 2012
, royalty revenue was
$157.7 million
and net income attributable to Royal Gold
stockholders
was
$52.0 million
, or
$0.84
per basic share. This compares to royalty
revenue of
$133.3 million
and net income attributable to Royal Gold
stockholders of
$45.9 million
, or
$0.83
per basic share, for the
six-month period ended
December 31, 2011
.

Adjusted EBITDA1 for the second quarter of fiscal 2013 was a
record
$73.4 million
representing 92% of revenue, an increase of 18%
compared to Adjusted EBITDA of
$62.1 million
or 90% of revenue for the
prior year period. Cash flow from operations for the quarter was
$10.9
million
, or
$0.17
per basic share compared with
$29.3 million
or
$0.53
per share for the second quarter of fiscal 2012. Cash flow from
operations was negatively impacted by provisional income tax payments of
$22.6 million
normally due during the quarter, and the timing of a
withholding tax payment of
$17.2 million
, which is expected to be
recovered in future periods.

The 16% increase in revenue for the quarter was largely driven by
increased production at Andacollo, Holt, Robinson, Mulatos, Las Cruces,
Canadian Malartic and Wolverine, as well as the higher average price of
gold and other metals. These increases were partially offset during the
period by production declines at Voisey’s Bay, Cortez, Leeville and
Dolores. The average price of gold for the quarter was
$1,722
per ounce
compared with
$1,688
per ounce for the comparable period, an increase of
2%.

As of
December 31, 2012
, the Company had a working capital surplus of
$762.5 million
. Current assets were
$781.1 million
(including
$680.7
million
in cash and equivalents), compared to current liabilities of
$18.6 million
, resulting in a current ratio of approximately 42 to 1. In
addition to available working capital, the Company had
$350 million
available under its revolving line of credit.

Tony Jensen , President and CEO, commented, “Our broad and diverse
portfolio of assets continues to provide strong financial results as
demonstrated by our record quarterly royalty revenue and Adjusted
EBITDA. During the quarter, the majority of our producing properties
performed well and, in particular, Andacollo recorded record gold
production. We were also pleased that Las Cruces reached its design
capacity, and several other properties continued to make steady progress
toward targeted production levels.”

RECENT DEVELOPMENTS

Acquisition of Additional Royalty Option on the
KSM Project

In December, the Company increased the net smelter return (“NSR”)
royalty option it may acquire on the Kerr-Sulphurets-Mitchell (“KSM”)
project from 1.25% to 2.0%. The net cost to acquire the option was
approximately
$3.6 million
. The Company now holds the right to purchase
either a 1.25% NSR royalty for
C$100 million
, or a 2.0% NSR royalty for
C$160 million
on all of the gold and silver production from the project,
payable in three equal installments over a 540-day period following
exercise of its purchase right. The options to purchase the NSR royalty
will remain exercisable for 60 days following Royal Gold’s satisfaction
that the project has received all material approvals and permits, has
sufficient committed funding for construction, and certain other
conditions have been met.

PROPERTY HIGHLIGHTS

Highlights at certain of the Company’s principal producing and
development properties during the quarter ended
December 31, 2012
are
listed below:

Producing Properties

Andacollo – Gold production increased during the quarter due to
higher grade ore and improved recoveries. Teck continues to increase
mill throughput rates as they de-bottleneck and optimize the plant.

Canadian Malartic – Osisko reported that fourth quarter gold
production totaled 101,544 ounces with calendar 2012 output of 388,478
ounces. During the quarter, throughput was affected by a 6-day shutdown
to complete the installation of the second pebble crusher and to make
modifications to various conveying systems in the crushing and grinding
circuits. Osisko also announced calendar 2013 gold production guidance
of between 485,000 and 510,000 ounces.

Cortez – Barrick continued to prioritize production from their
higher grade Cortez Hills operations that is not covered by our royalty
interest. As a result, production decreased during the period.

Dolores – Pan American announced that calendar 2013 capital
expenditures will include construction of a third leach pad, significant
pre-stripping and the systematic rehabilitation of the mining fleet. Pan
American also announced calendar 2013 production guidance of between
3.25 million to 3.45 million ounces of silver and between 63,500 to
68,000 ounces of gold.

Holt –
St Andrew Goldfields
reported production of 15,082 ounces
of gold for the quarter with mill recoveries at 94%. The operator stated
that construction of a new ore pass is complete and that it expects to
see increased production capacity once commissioning is finalized in
mid-January.

Las Cruces – Inmet announced that calendar 2012 copper production
at Las Cruces increased by more than 60% to 67,700 tonnes from 42,100
tonnes in calendar 2011. The operator also announced calendar 2013
production guidance of between 68,500 to 72,000 tonnes of copper.

Leeville – A portion of the mine production at Leeville was
derived from an area outside of our royalty interest resulting in a
decrease in royalty revenue over the prior period.

Mulatos – Alamos reported record production of 67,800 ounces of
gold during the fourth quarter achieving its production guidance for the
year of 200,000 ounces of gold. Production for the quarter benefitted
from higher than budgeted throughput and grade from the gravity mill in
addition to record levels of quarterly crusher throughput that averaged
17,900 tonnes of ore per day.

Peñasquito –
Goldcorp
reported that water availability
issues limited mill throughput rates. They plan to bring additional
water wells into production within the
Cedros Basin
in addition to new
dewatering wells within the Chile Colorado pit. The additional water
wells in calendar 2013 are expected to increase mill throughput to
105,000 tonnes per day. A hydrology study is underway to develop a
long-term water strategy and is expected to be completed during the
first half of 2013.
Goldcorp
also announced calendar 2013 production
guidance of between 360,000 to 400,000 ounces of gold and between 20 to
21 million ounces of silver.

Voisey’s Bay – The variability in Vale’s shipping schedule
continues to result in uneven metal sales quarter-over-quarter. Copper
sales for the quarter were lower than expected due to increased sales
during the period ended
September 30, 2012
.

Wolverine –Yukon Zinc stated that production growth
during the quarter was due to increased throughput, as they continue to
ramp up to design capacity, with improved metallurgical performance and
recoveries in the mill.

Development Properties

Mt. Milligan –
Thompson Creek
announced that they received
notification from the
Department of Fisheries and Oceans
approving its
fish habitat compensation plan, as required by Environment Canada's
Metal Mining Effluent Regulations. This approval was the final step to
authorize deposition of tailings material into the zero discharge
tailings storage facility and the final authorization required to
operate the Mt. Milligan mine.
Thompson Creek
also reiterated that the
Mt. Milligan project remains on schedule with commercial production
expected in the fourth quarter of calendar 2013.

Pascua-Lama – Barrick reported that construction management has
been transferred to Fluor and that the project team has been
significantly strengthened. As disclosed with its third quarter 2012
financial results, Barrick indicated it expected initial gold production
in the second half of 2014, and that the definitive estimate of costs
and schedule for the project would be complete by the time of its 2012
year-end results in mid-February.

Additional Property Information

Second quarter fiscal 2013 production and revenue for the Company’s
principal interests are shown in Table 1 and historical production data
is shown in Table 2. For more detailed information about each of our
principal interests, please refer to the Company’s most recent Annual
Report on Form 10-K, our Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed with the
SEC
and available on the SEC’s
website located at www.sec.gov,
or our website located at www.royalgold.com.

CORPORATE PROFILE

Royal Gold
is a precious metals royalty company engaged in the
acquisition and management of precious metals royalties and similar
interests. The Company owns interests on 205 properties on six
continents, including interests on 39 producing mines and 28 development
stage projects. Royal Gold
is publicly traded on the NASDAQ Global
Select Market under the symbol “RGLD,” and on the
Toronto Stock Exchange
under the symbol “RGL.” The Company’s website is located at www.royalgold.com.

Note: Management’s conference call reviewing the second quarter
results will be held todayat
10:00 a.m. Mountain Time
(
noon
Eastern Time
) and will be available by calling (800) 603-2779 (
North
America
) or (973) 200-3960(international), access #85826820. The
call will be simultaneously broadcast on the Company’s website at www.royalgold.com under the “Presentations” section. A replay of this webcast will be
available on the Company’s website approximately two hours after the
call ends.

________________________

Cautionary “Safe Harbor” Statement Under the Private Securities
Litigation Reform Act of 1995: With the exception of historical
matters, the matters discussed in this press release are forward-looking
statements that involve risks and uncertainties that could cause actual
results to differ materially from projections or estimates contained
herein. Such forward-looking statements include statements about the
Company’s assets continuing to deliver strong financial results; further
production increases at Andacollo, Peñasquito, Canadian Malartic, Holt,
and Wolverine; and the operators’ expectation of production,
construction, ramp up, reaching design capacity, throughput, water
availability and other developments at various mines. Factors that could
cause actual results to differ materially from the projections include,
among others, precious metals, copper and nickel prices; performance of
and production at the Company's royalty properties; decisions and
activities of the operators of the Company's various properties;
unanticipated grade, geological, metallurgical, processing or other
problems the operators of the mining properties may encounter; delays in
the operators securing or their inability to secure necessary
governmental permits; changes in operator’s project parameters as plans
continue to be refined; economic and market conditions; the ability of
the various operators to bring projects into production as expected; and
other subsequent events; as well as other factors described in the
Company's Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and
other filings with the
Securities and Exchange Commission
. Most of these
factors are beyond the Company’s ability to predict or control. The
Company disclaims any obligation to update any forward-looking statement
made herein. Readers are cautioned not to put undue reliance on
forward-looking statements.

1

The Company defines Adjusted EBITDA, a non-GAAP financial measure,
as net income plus depreciation, depletion and amortization,
non-cash charges, income tax expense, interest and other expense,
and any impairment of mining assets, less non-controlling
interests in operating income from consolidated subsidiaries,
interest and other income, and any royalty portfolio restructuring
gains or losses (see Schedule A).

Reported production relates to the amount of metal sales that are
subject to our royalty interests for the periods ended December 31,
2012 and December 31, 2011, as reported to us by the operators of
the mines.

2

The royalty rate is 75% until 910,000 payable ounces of gold have
been produced – 50% thereafter. There have been approximately
132,000 cumulative payable ounces produced as of December 31, 2012.
Gold is produced as a by-product of copper.

3

Revenues consist of provisional payments for concentrates produced
during the current period and final settlements for prior production
periods.

4

The Company’s royalty is subject to a 2.0 million ounce cap on gold
production. There have been approximately 1.0 million ounces of
cumulative production, as of December 31, 2012. NSR sliding-scale
schedule (price of gold per ounce – royalty rate): $0.00 to $299.99
– 1.0%; $300 to $324.99 – 1.50%; $325 to $349.99 – 2.0%; $350 to
$374.99 – 3.0%; $375 to $399.99 – 4.0%; $400 or higher – 5.0%.

“Other” includes all of the Company’s non-principal producing
royalties for the periods ended December 31, 2012 and 2011.
Individually, no royalty included within “Other” contributed greater
than 5% of our total royalty revenue for any of the periods.

TABLE 2Historical Production

PROPERTY2

ROYALTY

OPERATOR

METAL(S)

REPORTED PRODUCTION1FOR THE QUARTER ENDED

September 30,2012

June 30,2012

March 31,2012

December 31,2011

Andacollo

75% NSR

Teck

Gold

15,937 oz.

11,908 oz.

13,174 oz.

13,070 oz.

Peñasquito

2.0% NSR

Goldcorp

Gold
Silver
Lead
Zinc

131,239 oz.
7.4M oz.
41.7M lbs.
96.6M lbs.

90,554 oz.
6.0M oz.
42.2M lbs.
90.8M lbs.

87,517 oz.
6.6M oz.
52.4M lbs.
75.9M lbs.

67,827 oz.
5.0M oz.
40.2M lbs.
78.4M lbs.

Voisey's Bay

2.7% NSR

Vale

Nickel
Copper

33.9M lbs.
43.6M lbs.

30.6M lbs.
2.9M lbs.

50.9M lbs.
9.7M lbs.

27.4M lbs.
78.6M lbs.

Holt

0.00013 x quarterly average gold price

St Andrew Goldfields

Gold

12,870 oz.

11,469 oz.

8,839 oz.

11,461 oz.

Robinson

3.0% NSR

KGHM

Gold
Copper

9,072 oz.
36.9M lbs.

9,191 oz.
32.5M lbs.

5,673 oz.
23.8M lbs.

7,193 oz.
21.1M lbs.

Mulatos

1.0% to 5.0% NSR

Alamos

Gold

42,310 oz.

46,077 oz.

50,493 oz.

43,223 oz.

Cortez

GSR1 and GSR2
GSR3
NVR1

Barrick

Gold

25,751 oz.

26,845 oz.

23,362 oz.

23,609 oz.

Las Cruces

1.5% NSR

Inmet

Copper

46.2M lbs.

37.3M lbs.

29.9M lbs.

28.1M lbs.

Canadian Malartic

1.0% to 1.5% NSR

Osisko

Gold

91,737 oz.

91,734 oz.

90,845 oz.

54,141 oz.

Leeville

1.8% NSR

Newmont

Gold

68,026 oz.

36,582 oz.

64,291 oz.

102,946 oz.

Wolverine

0.0% to 9.445% NSR

Yukon Zinc

Gold
Silver

1,200 oz.
494,496 oz.

842 oz.
338,736 oz.

393 oz.
326,017 oz.

294 oz.
366,922 oz.

Dolores

3.25% NSR
2.0% NSR

Pan American Silver

Gold
Silver

13,244 oz.
773,369 oz.

10,085 oz.
643,972 oz.

14,510 oz.
858,600 oz.

20,663 oz.
887,007 oz.

1

Reported production relates to the amount of metal sales that are
subject to our royalty interests for the stated period, as reported
to us by the operators of the mines.

2

See individual property footnotes on page 7.

1

Reported production relates to the amount of metal sales that are
subject to our royalty interests for the stated period, as reported
to us by the operators of the mines.

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation, depletion and amortization

42,620

38,639

Gain on distribution to non-controlling interest

(88

)

(3,284

)

Non-cash stock-based compensation expense

3,900

4,066

Tax benefit of stock-based compensation exercises

(1,214

)

(3,086

)

Restructuring on royalty interests in mineral properties

-

1,328

Deferred tax benefit

(2,166

)

(847

)

Amortization of debt discount

4,448

-

Changes in assets and liabilities:

Royalty receivables

(16,808

)

(15,693

)

Prepaid expenses and other assets

(19,659

)

1,385

Accounts payable

(661

)

(194

)

Income tax receivable

1,827

1,947

Other liabilities

(626

)

785

Net cash provided by operating activities

$

64,425

$

75,436

Cash flows from investing activities:

Acquisition of royalty interests in mineral properties

(215,032

)

(148,182

)

Proceeds on sale of Inventory - restricted

118

4,842

Other

(38

)

(128

)

Net cash (used in) investing activities

$

(214,952

)

$

(143,468

)

Cash flows from financing activities:

Borrowing from credit facility

-

100,000

Repayment of debt

-

(37,800

)

Common stock dividends

(17,915

)

(12,209

)

Distribution to non-controlling interests

(1,273

)

(6,315

)

Proceeds from the issuance of common stock

473,776

2,917

Tax benefit of stock-based compensation exercises

1,214

3,086

Net cash provided by financing activities

$

455,802

$

49,679

Net increase (decrease) in cash and equivalents

305,275

(18,353

)

Cash and equivalents at beginning of period

375,456

114,155

Cash and equivalents at end of period

$

680,731

$

95,802

SCHEDULE A

Non-GAAP Financial Measures

The Company computes and discloses Adjusted EBITDA. Adjusted EBITDA is a
non-GAAP financial measure. Adjusted EBITDA is defined by the Company as
net income plus depreciation, depletion and amortization, non-cash
charges, income tax expense, interest and other expense, and any
impairment of mining assets, less non-controlling interests in operating
income of consolidated subsidiaries, interest and other income, and any
royalty portfolio restructuring gains or losses. Other companies may
define and calculate this measure differently. Management believes that
Adjusted EBITDA is a useful measure of the performance of our royalty
portfolio. Adjusted EBITDA identifies the cash generated in a given
period that will be available to fund the Company's future operations,
growth opportunities, shareholder dividends and to service the Company's
debt obligations. This information differs from measures of performance
determined in accordance with U.S. generally accepted accounting
principles (“GAAP”) and should not be considered in isolation or as a
substitute for measures of performance determined in accordance with
U.S. GAAP. Below is a reconciliation of net income to Adjusted EBITDA:

Royal Gold, Inc.

Adjusted EBITDA Reconciliation

For The Three Months Ended

December 31,

2012

2011

(Unaudited, in thousands)

Net income

$

27,559

$

24,249

Depreciation, depletion and amortization

21,120

21,419

Non-cash employee stock compensation

1,805

1,868

Interest and other income

(29

)

(489

)

Interest and other expense

6,988

1,609

Income tax expense

16,315

14,051

Non-controlling interests in operating income of consolidated
subsidiaries

(342

)

(572

)

Adjusted EBITDA

$

73,416

$

62,135

For The Six Months Ended

December 31,

2012

2011

(Unaudited, in thousands)

Net income

$

52,852

$

50,390

Depreciation, depletion and amortization

42,620

38,639

Non-cash employee stock compensation

3,900

4,066

Restructuring on royalty interests in mineral properties

-

1,328

Interest and other income

(139

)

(3,322

)

Interest and other expense

13,157

3,387

Income tax expense

32,776

26,433

Non-controlling interests in operating income of consolidated
subsidiaries